America's Baby Boom And Baby Bust Cities

Joel Kotkin
, ContributorI cover demographic, social and economic trends around the world.Opinions expressed by Forbes Contributors are their own.

At this most familial time of the year, as recent events make us hold our children even closer, we might want to consider what kinds of environments are most conducive to having offspring. Alarm bells are beginning to ring in policy circles over the decline of the U.S. birth rate to a record low. If unaddressed, this could pose a vital threat the nation’s economic and demographic vitality over the next few decades.

In contrast to last week, when we examined the nearly uniform aging of America's biggest cities over the last decade, the decline in the country’s youth population has been in relative terms. In 2000, roughly 21.4% of Americans were under 15; in 2010, that percentage had dropped to 19.8%. However, unlike in parts of Europe and East Asia, the number of American children did not decline – there were over a million more in 2010, a 1.7% increase.

Yet since children are by definition the bearers of the future, knowing where new families and households are forming should be of critical interest not only to demographers, but to investors, businesses and, over time, even politicians. Demographer Wendell Cox crunched Census data for Forbes on the youth populations of the 51 largest U.S. metropolitan statistical areas. His analysis reveals sharp differences between various regions of the country, and suggests where future growth in the country may be the strongest.

The youth population expanded in 31 of the 51 metro areas from 2000 to 2010. The 10 regions that posted the strongest growth were in Texas, the Southeast and the Intermountain West. Leading the nation is Raleigh, N.C., where the number of children under 15 rose a whopping 45%, or 77,421. Texas is experiencing something of a baby boom, paced by Austin, second among America's largest metro areas with a youth population expansion of 38%; Dallas-Ft. Worth (sixth); Houston (eighth); and San Antonio (11th).

Out west, Las Vegas (third place) and Phoenix (fifth) may be better known as retirement destinations, but also have become increasingly attractive to families. Other western cities with a strong increase in children include Riverside-San Bernardino, Calif. (12th), Salt Lake City (13th) and Oklahoma City (15th). Surprisingly some Midwestern cities also perform relatively well, led by Indianapolis (16th) and Columbus, Ohio (18th).

If these regions are attractive to young families, which ones are not? Outside of last place New Orleans, whose demographic data was distorted by the massive outflow of population due to the Katrina disaster, the sad sacks on this list include many of the usual suspects: aging industrial centers. Buffalo's youth population declined 16%, Detroit's, 15%; and Cleveland's 14%. In these cities, notes Cleveland policy researcher Richey Piiparinen, pessimism about the future, for you and your children, naturally results from “being born into post-industry.”

Not having kids in what may seem to be a ruined economy is understandable. But many metro areas that are usually associated with youthfulness and aspiration are producing fewer children, including Los Angeles (sixth place on our list of baby bust cities with a decline of 12.4%), New York, NY-NJ-PA (eighth, down 7%) and San Francisco-Oakland (16th, -2.7%). Over the past decade these metro areas have lost hundreds of thousands from their under 15 population; Los Angeles has an astounding 360,000 fewer 15 year olds than in 2000 while New York has almost 270,000 fewer and Boston some 62,000 less.

What do these trends mean for the future? New York has lost about as many children as Dallas-Ft. Worth has gained --- a difference of a half million. The gap between increasingly childless Los Angeles and Houston is even wider, and approaches 600,000. These numbers suggest a tremendous shift in the future locations of new American households, with all that implies for retail sales, workforce growth and residential construction demand.

Indeed a recent Pitney-Bowes study projects that the largest absolute growth in households in the next five years will be in Houston, with a gain of 140,000, or 6.7%, while Atlanta is projected to add slightly over 100,000 households, 5.4% more.

In contrast the largest metropolitan area in the country, the New York region, will grow by a mere 75,000 households, a paltry 1.7% clip, while Los Angeles will add only 46,000. Chicago, the third largest metro area, is only expected to add 33,000 households, a growth rate of barely 1.2%.

Why is household formation and child-rearing so anemic in these places, which are often celebrated for being attractive to the young and dominate so many key industries? One key reason, suspects demographer Cox, is housing prices relative to incomes. This is largely due to high regulatory costs that discourage new housing supply, particularly the single-family homes preferred by most families. Housing costs relative to incomes are more than two times higher in New York or Los Angeles than in Houston, Dallas-Fort Worth, Atlanta or, for that matter, virtually all the metropolitan areas most attractive to families.

Another factor may be the impact of density, which, Cox demonstrates, tends to depress fertility rates not only here in the United States, but through much of the world. The fastest-growing youth populations tend to be in lower-density regions such as Austin, Raleigh and Atlanta; the slower growth, outside of the old industrial belt tends to be in the high-density regions.

These differences also exist on the metro level. Within regions, certain areas attract more families than others. For the most part, despite the media hype about families returning to the city, the biggest declines in the under 15 population tend to be in the core urban areas.

Take New York, our greatest city and one that has experienced considerable improvement in quality of life over the last two decades. Yet despite this, the under 15 population of New York County (Manhattan) dropped nearly 10% over the past decade, a net loss of 21,000. Barely 12% of Manhattanites are under 15, far below the national rate of 19.8%. Similar declines have occurred as well in Brooklyn, a borough that many priced-out Manhattan couples have seen as a refuge for young families.

So where are the kids being born in the New York area? The only gainers were in the much-despised, lower-density exurbs such as Rockland County, N.Y., and New Jersey's Ocean County. A similar, if even more marked pattern can be seen in the greater Chicago area, where Cook County, which contains the Windy City, suffered a 160,000 net drop over the decade in its under 15 population; with an 18% decrease in its student body, it’s not surprising that half of Chicago's public schools are considered underutilized. Meanwhile exurban Will and Kane counties together have gained some 56,000 children under 15, up over 20%.

Similar phenomena can be observed in most metropolitan areas, including San Francisco, which increasingly resembles a child-free zone. With just 11.2% of the population under 15, the City by the Bay now has the lowest percentage of children of any large county in the nation.

These numbers tell us some intriguing things about our demographic future, and perhaps suggest how to address a potential “birth death.” As the percentage of children relative to adults, and particularly seniors, declines, it’s imperative to identify environments attractive to young families. For the most part, this means areas that offer the best mix of job opportunities, reasonable housing costs and, for the most part, lower density living. If developers and investors can transcend the incessant urban hype and look at the numbers, they may want to look more closely at these places as most likely to enjoy future growth.